Does too much liquidity generate instability?

AbstractCorporate demand for cash is related to a number of firm-specific characteristics, like the presence of transaction costs, information asymmetry in credit markets, uncertainty and risk aversion. The purpose of this paper is to build a dynamic model that describes the potential chaotic effects of the accumulation of cash by firms over a prolonged period of time. By exploring the theoretical connections between firm financial policies and investment decisions, we show that too much liquidity might generate economic instability. When firm increases the share of cash devoted to risky investment, and reduces the share of cash distributed to shareholders as dividends, the fixed point of the system changes from being stable to being unstable. Moreover, the impact of such a policy on the stability of the system is larger the greater the investment risk. The chaotic behavior is mainly observable in the dynamics of cash, which in turn may affect all investment decisions

Early intrathecal infusion of everolimus restores cognitive function and mood in a murine model of Alzheimer's disease

The discovery that mammalian target of rapamycin (mTOR) inhibition increases lifespan in mice and restores/delays many aging phenotypes has led to the identification of a novel potential therapeutic target for the treatment of Alzheimer's disease (AD). Among mTOR inhibitors, everolimus, which has been developed to improve the pharmacokinetic characteristics of rapamycin, has been extensively profiled in preclinical and clinical studies as anticancer and immunosuppressive agent, but no information is available about its potential effects on neurodegenerative disorders. Using a reliable mouse model of AD (3 × Tg-AD mice), we explored whether short-term treatment with everolimus injected directly into the brain by osmotic pumps was able to modify AD-like pathology with low impact on peripheral organs. We first established in non-transgenic mice the stability of everolimus at 37 °C in comparison with rapamycin and, then, evaluated its pharmacokinetics and pharmacodynamics profiles through either a single peripheral (i.p.) or central (i.c.v.) route of administration. Finally, 6-month-old (symptomatic phase) 3 × Tg-AD mice were treated with continuous infusion of either vehicle or everolimus (0.167 μg/μl/day, i.c.v.) using the osmotic pumps. Four weeks after the beginning of infusion, we tested our hypothesis following an integrated approach, including behavioral (tests for cognitive and depressive-like alterations), biochemical and immunohistochemical analyses. Everolimus (i) showed higher stability than rapamycin at 37 °C, (ii) poorly crossed the blood-brain barrier after i.p. injection, (iii) was slowly metabolized in the brain due to a longer t 1/2 in the brain compared to blood, and (iv) was more effective in the CNS when administered centrally compared to a peripheral route. Moreover, the everolimus-induced mTOR inhibition reduced human APP/Aβ and human tau levels and improved cognitive function and depressive-like phenotype in the 3 × Tg-AD mice. The intrathecal infusion of everolimus may be effective to treat early stages of AD-pathology through a short and cyclic administration regimen, with short-term outcomes and a low impact on peripheral organs

Effect of parasympathetic stimulation on brain activity during appraisal of fearful expressions

Autonomic nervous system activity is an important component of human emotion. Mental processes influence bodily physiology, which in turn feeds back to influence thoughts and feelings. Afferent cardiovascular signals from arterial baroreceptors in the carotid sinuses are processed within the brain and contribute to this two-way communication with the body. These carotid baroreceptors can be stimulated non-invasively by externally applying focal negative pressure bilaterally to the neck. In an experiment combining functional neuroimaging (fMRI) with carotid stimulation in healthy participants, we tested the hypothesis that manipulating afferent cardiovascular signals alters the central processing of emotional information (fearful and neutral facial expressions). Carotid stimulation, compared with sham stimulation, broadly attenuated activity across cortical and brainstem regions. Modulation of emotional processing was apparent as a significant expression-by-stimulation interaction within left amygdala, where responses during appraisal of fearful faces were selectively reduced by carotid stimulation. Moreover, activity reductions within insula, amygdala, and hippocampus correlated with the degree of stimulation-evoked change in the explicit emotional ratings of fearful faces. Across participants, individual differences in autonomic state (heart rate variability, a proxy measure of autonomic balance toward parasympathetic activity) predicted the extent to which carotid stimulation influenced neural (amygdala) responses during appraisal and subjective rating of fearful faces. Together our results provide mechanistic insight into the visceral component of emotion by identifying the neural substrates mediating cardiovascular influences on the processing of fear signals, potentially implicating central baroreflex mechanisms for anxiolytic treatment targets

Fear processing is differentially affected by lateralized stimulation of carotid baroreceptors

Information processing, particularly of salient emotional stimuli, is influenced by cardiovascular afferent signals. Carotid baroreceptors signal the state of cardiovascular arousal to the brain, controlling blood pressure and heart rate via the baroreflex. Animal studies suggest a lateralization of this effect: Experimental stimulation of the right carotid sinus has a greater impact on heart rate when compared to left-sided stimulation. We tested, in humans, whether the processing of emotional information from faces was differentially affected by right versus left carotid afferents. To achieve so, we used an automated neck suction device to stimulate the carotid mechanoreceptors in the carotid sinus (parasympathetic pathway) synchronously with functional magnetic resonance imaging (fMRI) acquisition whilst participants were engaged in an emotional rating task of fearful and neutral faces. We showed that both right and left carotid stimulation influenced brain activity within opercular regions, although a stronger activation was observed within left insula during right stimulation compared to left stimulation. As regards the processing of fearful faces, right, but not left carotid stimulation attenuated the perceived intensity of fear, and (albeit to a lesser extent) enhanced intensity ratings of neutral faces. Mirroring the behavioural effects, there was a significant expression-by-stimulation interaction for right carotid stimulation only, when bilateral amygdala responses were attenuated to fear faces and amplified to neutral faces. Individual differences in basal heart rate variability (HRV) predicted the extent to which right carotid stimulation attenuated amygdala responses during fear processing. Our study provides unique evidence for lateralized viscerosensory effects on brain systems supporting emotional processing

The impact of digital start-up founders’ higher education on reaching equity investment milestones

This paper builds on human capital theory to assess the importance of formal education among graduate entrepreneurs. Using a sample of 4.953 digital start-ups the paper evaluates the impact of start-up founding teams’ higher education on the probability of securing equity investment and subsequent exit for investors. The main findings are: (1), teams with a founder that has a technical education are less likely to remain self-financed and are more likely to secure equity investment and to exit, but the impact of technical education declines with higher level degrees, (2) teams with a founder that has doctoral level business education are less likely to remain self-financed and have a higher probability of securing equity investment, while undergraduate and postgraduate business education have no significant effect, and (3) teams with a founder that has an undergraduate general education (arts and humanities) are less likely to remain self-financed and are more likely to secure equity investment and exit while postgraduate and doctoral general education have no significant effect on securing equity investment and exit. The findings enhance our understanding of factors that influence digital start-ups achieving equity milestones by showing the heterogeneous influence of different types of higher education, and therefore human capital, on new ventures achieving equity milestones. The results suggest that researchers and policy-makers should extend their consideration of universities entrepreneurial activity to include the development of human capital

A meta-analysis of the investment-uncertainty relationship

In this article we use meta-analysis to investigate the investment-uncertainty relationship. We focus on the direction and statistical significance of empirical estimates. Specifically, we estimate an ordered probit model and transform the estimated coefficients into marginal effects to reflect the changes in the probability of finding a significantly negative estimate, an insignificant estimate, or a significantly positive estimate. Exploratory data analysis shows that there is little empirical evidence for a positive relationship. The regression results suggest that the source of uncertainty, the level of data aggregation, the underlying model specification, and differences between short- and long-run effects are important sources of variation in study outcomes. These findings are, by and large, robust to the introduction of a trend variable to capture publication trends in the literature. The probability of finding a significantly negative relationship is higher in more recently published studies. JEL Classification: D21, D80, E22 1

African Financial Development Dynamics: Big Time Convergence

In the first critical assessment of convergence in financial development dynamics in Africa, we find overwhelming support for integration. The empirical evidence is premised on 11 homogenous panels based on regions(Sub-Saharan and North Africa), income-levels(low, middle, lower-middle and upper-middle), legal-origins(English common-law and French civil-law) and religious dominations(Christianity and Islam). We examine convergence in financial intermediary dynamics of depth, efficiency, activity and size. Findings suggest that countries with small-sized financial intermediary depth, efficiency, activity and size are catching-up with countries with large-sized financial intermediary depth, efficiency, activity and size respectively. We also provide the speeds of convergence and time necessary to achieve a full(100%) convergence. As a policy implication African governments should not relent in structural and institutional reforms